Even if you normally pay for purchases using cash or checks, you still should know the necessary steps to establishing credit, and maintaining good credit, because credit is often a basic life essential:
- You may need credit for such routine matters as establishing phone service or having other utilities connected to your home.
- Good credit can also be essential to securing favorable financing terms when buying a car, household furnishings, or even a new home.
- Employers may check the credit rating of job applicants. Many employers feel that a solid credit rating is an indication that you handle your personal matters responsibly, and this reflects positively on your ability to successfully manage your job.
- A good credit rating also may make it easier for you to rent an apartment. A positive credit rating may be a sign to landlords that you are a person who's more likely to pay your rent on time each month.
- Increasingly, companies are using credit ratings to help manage risk. For instance, in the future, it is anticipated that more and more insurance and health care companies will be relying on credit reports, credit scores, and other proprietary risk models in deciding how to manage their coverage and rates. The bottom line: Maintaining a good credit history, and credit score may prove very beneficial to you in securing more favorable rates and policies.
The bottom line: Credit plays an important role in virtually everyone's life and finances. A favorable credit report, credit score, and good credit habits, could help you save tens of thousands of dollars or more over the course of your life. That's why it is so important to stay on top of your credit by checking your credit report and credit score, and monitoring your credit on a regular basis!